Krugman’s Notes Should Be For Coral Gables

Let soothsayers of good times ahead–including city managers who are speeding up investments and refinancing debt–recognize that we are not slipping out of a recession and we may be slipping back into a recession.

Put together

  • declining property values and revenues for the city of Coral Gables,
  • resistance from unions to accept really important sacrifices,
  • new city debt and ambitious capital program (admittedly, some of which may essential maintenance of city infrastructure),
  • a faltering Biltmore lease,
  • a faltering, sickly real estate market,
  • sluggish retail sales, and
  • candidate promises of no new taxes
and you may get continuing financial weakness and more taxes in Coral Gables.
We note now that

…estimates now suggest that we have now gone through a year and a half of “recovery” that has failed to make any progress toward closing the gap between what the economy should be producing and what it’s actually producing.

via Third Depression Watch – NYTimes.com.

A Test For Democracy: Will City of Coral Gables Start Spending Again?

Seems like there is certain pressure from businesses and a willing disposition of the city manager and some commissioners to start spending big on city projects.  It is said that we can do that because interest rates are low–not a good financial reason.

There is pressure from Chamber of Commerce, Miracle Mile businesses and the IBD to undertake the Miracle Mile and Giralda Streetscape Project.  This is (and I underline) estimated to cost $16 million.  You can bet that the project will cost more after government and businesses get their hands on the “vision” project.  Why is this called the Miracle Mile Streetscape anyway, when it includes Giralda.  Why include Giralda?  Are you sure that this project will “pay for itself?”

One commissioner has already talked about spending money on parks and a senior center and speaks fondly of the free (subsidized) trolley and the Ponce street upgrading.  Good projects, but can we afford more of them now?  I think not.  Why should the taxpayers subsidize the trolley. (By the way, subsidizing the trolley takes business away from the city parking lots, so the real subsidies are much larger than the operating and maintenance costs of the trolley).

Let’s hear from the mayor and commissioners just three goals: we need to fix pensions and hold salaries down for several years, freeze or reduce taxes and fix the Biltmore lease, and freeze and reduce salaries.  Please, no more studies are needed–just decisions and actions by the commissioners.

Failure to do any of these will mean failure for the city’s finances and more taxes for us all in Coral Gables.

More on Fees and Property Taxes–Taxes or Fees Will Rise For Sure

Anyone who imagines that property tax rates and revenues will not have to be increased in the city of Coral Gables this year and in the coming budget cycles are dreaming.

There is no one in this crowd of candidates who will be able to stop the pressure to increase tax rates and revenues as property values continue to decline in the face of huge budget liabilities.

Now you are voting on firm increases in taxes( a la Slesnick) or more moderate increases.  Mr. Kerdyk will be reelected and he votes for taxes.  Ms. Anderson plus (say) Cason or Korge plus Rosenblatt or Sanabria will be on the commission.  Well meaning people they are, but they know how to add up revenues and expenses and some are big spenders.

They all mostly want the Mircle Mile/Giralda project so that means more spending.  It takes years to reorganize the Building and Zoning services.  We should charge for the trolley, but Mr. Kerdyk and friends of Miracle Mile will not stand for that.  Be sure that the Biltmore liabilities will not be fixed that easily and taxpayers will continue to subsidize that albatros.  Even with favorable negotiations with police and firefighters (who favor Rosenblatt and Sanabria, maybe others), the impact on pension liabilities is years away.  If Miami-Dade holds the line or reduces property taxes that is another opening for the city of Coral Gables to increase property taxes.

That is why I favor increasing fees across the board with a user-pays approach for fire services, trash, and permits and others, rather than increasing unfair property taxes again and again.

In summary, I hope I am wrong, but the financial problems of the city will take several years to fix, even with a good economy and rising real estate market.

Coral Gables’ Fees Vs Property Taxes: Which Is Fair? Sanabria Is Wrong

Actually, fees are much fairer than property taxes in the State of Florida.  Through fees everyone pays the same for the same service (the poorest taxpayers might be excluded if you like), whereas, property taxes are paid more by newcomers than property owners who are long-time residents with homestead protection.

Sanabria’s proposal to cut fees is wrong because, again, it protects long-term property owners versus newcomers–a highly unfair system.  Fees are great because the user pays.  I say, give use more fees based on the real cost of the services.  For example, trash collection is highly subsidized in Coral Gables through (unfair) property taxes.  If fire services were charged through fees, then taxpayers would be screaming about the pensions and salaries of firefighters.  I wonder, is that why Sanabria is against fees?

(And I will not get into why we need an income tax in Florida along with an equalized property tax system, like many modern state governments.)

Krugman on Ryan’s Fantasy Budget. What About Coral Gables?

I wonder sometimes if this is not the model for the budget for Coral Gables. But no, the city keeps increasing taxes in the face of falling revenues or rising revenues.

It is timidity of tax cutting in Coral Gables that keeps taxes increasing and terrible past commitments of the city in pensions and salaries, as well as having way too many employees.

Actually, what is not good for the country (keep lowering taxes and spending) is just fine for a small bloated municipality.  At the federal level we know where the money is going (health, the military, social security, debt payments, and other small government programs).

Where does the money really go in Coral Gables–it goes for salaries and benefits–for which there have been no good studies of their efficient use.

Ryan is proposing huge (and largely unspecified) spending cuts; but he’s also proposing very large tax cuts, mainly, of course, for those with high incomes. And as you can see, a large part — roughly half — of the spending cuts are going, not to deficit reduction, but to finance those tax cuts.

Actually, it’s even worse, since the revenue figure in the Ryan plan is simply assumed, and is clearly too high given what he’s actually proposing on taxes; so either the fall in revenue will be even larger than shown here, or there will be unspecified tax hikes on the middle class.

via Where the Spending Cuts Go – NYTimes.com.